Letter to Congress on Secure Payments Act

Dear Chairman Luetkemeyer:

On behalf of the American Bankers Association (ABA), I am writing to express our strong support for the Secure Payments Act of 2024. This important legislation would require the Federal Reserve Board (Fed) to stop and fully examine the impact of their misguided proposal to reduce the regulated interchange cap under Regulation II on banks and underserved consumers.

The Fed's proposal to slash debit interchange fees under Regulation II is part of a tsunami of new federal regulations that would have tangible, and potentially severe, consequences for banks of all sizes, their customers and their communities. While the current regulation's price caps have not been touched in a decade, the Fed is proposing changes that will fundamentally impair the sustainability of affordable deposit account products. Predictably, this will result in a reversal of successful financial inclusion efforts by increasing the costs of checking and other basic banking services, which among other things, would jeopardize low-cost Bank On accounts that have brought millions of Americans into the banking system.

The Fed's Regulation II proposal would implement dramatic regulatory changes that would have adverse consequences for the ability for banks to facilitate payments, secure these systems, and account for fraud, and provide low- and no-cost basic banking services consistent with their values and mission as community leaders. As required by the Secure Payments Act, the Fed should stop and conduct a rigorous study of this proposal's impacts and the cumulative impacts of the tsunami of newly finalized and pending regulations from the federal banking agencies. Thank you for your leadership on these policies, and we look forward to continuing to work with you and your staff to address these critical issues.

Sincerely,
Kirsten Sutton